Small and Medium Enterprise Report

This report analyzes the growth, development, and challenges faced by small and medium enterprises (SMEs), using the company Wiser as a case study. It explores various growth strategies, contemporary issues, environmental factors, and government support schemes. The report concludes with recommendations for SMEs to improve their performance and navigate the complexities of the business environment.

Small and medium
Enterprise

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................2
Findings ......................................................................................................................................2
CONCLUSION................................................................................................................................7
RECOMMENDATIONS.................................................................................................................7
.........................................................................................................................................................8
REFERENCES................................................................................................................................1

INTRODUCTION
Small and medium enterprises are the non subsidiary firm which are not dependent
anyone and hire very few employees from the one mention in the number of given of employees
and this number is according the country in which the organisation is been located. The meaning
of small and medium scale enterprise is dependant on the revenue they generate and the number
of employees they have. Generally in USA small companies have less than 50 employees and
medium sized organisations have less than 250 employees and they does not utilise the resources
of the large companies and their origin is on a entrepreneurial basis. These companies contribute
in the growth and development of the country. Main street companies can be compared to small
size companies whereas lower mid market companies are compared to medium sized companies
and they have a goodwill and less market share in the market as their owners have the more
involvement in the market. The factors that contributes to the size of the small and medium scale
enterprises are the number of employees working in the organisation, assets, annual sales or the
combination of all of these (Bruhn, 2013).
This report is about the company Wiser which is a small and medium scale enterprise
with 51- 200 employees working in it founded in 2013, headquarter in London and is a privately
held company with specialities in recruitment, consultancy, creative, web design, branding, film
production, marketing, employer branding, media, graduate jobs and many more. It is a
innovative and recruitment company, which gives recruitment services to the people who are
young and talent acquainted and is located in London. This assignment also shows the
contemporary issues related to the company and the issues that government has address to
resolve these issues. Moreover, it involves the development routes and alternative methods of
growth and evidences of investigation and evaluation of sources of finance. It also shows
evidence of designing a growth policy and the change to manage issues in the company.
A person who does not work for anyone and runs a small business or enterprise
perspective that all the losses and profits of the company are in hands of the person is termed as
an entrepreneur. They are creative, and innovative and plays a major role in the economy and
have the ability to future see the needs of the situation and come up with new ideologies and
strategies of the business. Successful entrepreneurs are the one who takes a high risk in their
business with the start-ups and are being rewarded with a high profit and has more business
expansion opportunities (Cosgun, 2012). An enterprise is the task or project which is difficult or
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risky and is a part of organisation of a economic activity of the business. It can also be defines as
the action of entrepreneur who start a business by risk by investing capital. There are different
nature of an enterprise. The first is Shoestring budget, in this an entrepreneur or group of few
people operates small business which is usually run on Shoestring budget which defines that the
function of the business is on a tight budget. The second is Labour intensive in which the firms
is dependant on their labour for the systematic functioning of the business and it involves more
of physical work rather than logical work (Gbandi, 2014). The third is Community based in
which the main motive of the business is to give satisfaction to the local customers or community
and focus on few areas and therefore can be termed as a community based organisations. The
fourth is Indigenous technology in which there are many small and medium scale industries
which uses old fashioned techniques and technologies which give uniqueness to their products
and services but it lacks the growth of the organisation.
TASK
Findings
Growth and development of the SME's
Growth and development refers to the enhancement of the business and the expansion of
the enterprises. Growth and development helps to know the financial as well as the market
position of the enterprise. The small scale and medium size industries have the following growth
and development.
 Approximately there were 5.6 million small and medium s scale industries at the
beginning of 2018.
 When the comparison was been made between the previous year to this year it was being
analysed that the small scale industries had a fall down of 0.5% which is approximately -
27,000 businesses and employment under SME's were increased by 2% which is
approximately +304,000.
 In contrast it is referable to the number of small business which are not being employed
which has a fall down by 1% which is -50,000 and the large business which are not
employing are increasing by 2%.
 There were more businesses now than it was in 2000 and the first falling series started in
2000 only (Hsu, 2012).
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Contemporary issues faced by the company
Contemporary issues can be termed as social issues which refers to the unwanted
situation that is conflicted by the society or a part of the society. The contemporary issues faced
by the company are mentioned below. Lack of adequate managerial training: Wiser company develop strategies of the
managers through the process of trail and error. The head level managers or the
employees off the company does not concentrate only on the plans for operation and
doest not consider strategic plans to implement in their organisation. Moreover, these
techniques of the manager are not standard with the global managers of other
organisations. Consequently , the manager of the Wiser company are adequately handling
the challenges faced by an enterprise (Kim, 2013 ). Lack of adequate finance and limited access to credit: The Wiser company does not
access to the finance or loans from the financial institutions which are commercial banks
and many more because the company is not able to give collateral security which is a
must consideration while giving the loan. The company has small asset base as it is
considered as small scale industries that is main reason it cannot provide immovable
assets for the collateral security and they brow from partners in case of financial crisis.
As a result, there is a deficiency in the credit force which eventually lead or forces the
company to make use cheap and local technology which is not appropriate most of the
times. Rapid technology changes: As the market is dynamic in nature, the fast changes in the
technology is an issue for the Wiser company. As the company do not have the much
capital and investment it is not able to adapt the new technologies in the market as this
requires are a very huge amount of initial cost as well as high installation costs. Many a
times theses technologies does not suit the need of the enterprises (Kotelnikov, 2014). New laws and regulations: The government or the stake holders continuously introduce
new regulations for the small scale and medium scale enterprises daily which can become
a threat to the Wiser company as some of these regulations and laws are difficult and
tough.
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 Inadequate knowledge and skills: The Wiser company employees do not have adequate
knowledge and skills and do not have the information about the managerial knowledge or
skills which lead to ineffective functioning of the business (Legg, 2015).
 Besides this issues the company also faces the issue of the poor infrastructure, poor
management of resources and inadequate support from the government.
Environment Factors that affect the small scale enterprise
Environmental factors are the influences which are from the external forces of the
environment. Though they do have a certain control on the business but they must be treated as
the part of the strategic planning. Environmental factors that effect the Wiser company are suited
in the four categories which are social, legal, political and economic which are mentioned below.
Social: There are various factors involve in the social environmental factors which
includes movements of the society, change in the values of the people and in the attitude of the
public towards the enterprise within the market. In Wiser, the people should analyse the trends
towards the society related to their enhancement of the living standards of the public employed.
This will help them to create a healthy and positive image in front of the public and will attract
local customers for the enterprise.
Political: This factors includes the communication with government and the agencies.
Here in the Wiser, company the should have the strong working relationship with the mayor and
members of the city of the country and it helps to rise the capacity causing the rules and
regulations that will affect the growth and productivity of the company.
Legal: The political landscape is similar to the legal environment the way it affects the
small scale enterprise. Changes in laws or city ordinances affects the enterprises directly. In
Wiser, the targeted market of the company is teens and younger group but there is a new curfew
which wants the people under 18 to be at home by 10p.m which may affect the operation of
hours of the enterprise.
Economic: In wiser company, the employment is given to the people at a low cost and
less amount as people have more budget concern during poor economies and the changes coming
in the interest rates of the loans and rules and regulations of the banks also affect the business of
the company (Mahmood, 2013).
Growth and development strategies of the enterprise
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The growth strategies used by the enterprises for their growth and development are
Expansion, diversification, joint venture, mergers and acquisitions, sub contracting and
franchising which are mentioned below.
1)Expansion: Expansion means to extend the business within the activity of the same line and
refers to the form of internal growth of the enterprise. It is the natural growth of the business
which take place within the specific course of time. This expansion is further divided into three
form which are discussed below (Olszak, 2012).
 Expansion through market penetration: It means the enlargement of the sales of the
business of its current product by enhancing the existing market by various schemes
launched to penetrate into a current market conditions.
 Expansion through market development: This expansion refers to determination of the
new markets for the current product and to improve the sale of the current product, the
organisation searches for the new customers. Expansion through product development and modification: It refers to creating or brining
improvisation in the current products to give the satisfaction to the customer and full
filing the needs of the customers.
2) Diversification: It is one of the most common form of the internal business growth. The
business growth has a certain area of limitation of doing enlargement of the business. It is
mandatory for every business to have a limit of expansion under which the business cannot grow
beyond a certain growth of the business. Diversification refers to the process adding more
products or markets or services to the existing one and it is required because according to the
life cycle concept of the product each and every product has a definite period of life (Olusegun,
2012). This strategy of diversification leads to the increase in both the private and the public
sectors of the company. There are usually four types of diversification which are horizontal
diversification, vertical diversification, concentric diversification and conglomerate
diversification.
3) Joint Venture :It is a type of external strategy of growth which is adopted by firms of the
business. It is a entity which results from a term of contractual agreement which is usually for a
longer duration among two or more than two parties to undertake the economic activities which
are mutual beneficial and equally contribute and share losses and profits of the organisation. It
is restricted to particular venture achievement and then the partners dissolves. The triggers have
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been analysed to make the joint ventures successful which are: Technology, Geography,
Regulation, Sharing of risk and capital and intellectual change.
4)Mergers and Acquisitions :It is another form of the external growth strategy. It means the
connection or to combine two or more current companies into one. It includes two terms that is
the acquisition and merger. Acquisition is the enterprise which acquires another enterprise and
one which is acquired is termed as merger. Thus it can be termed as that merger and acquisition
are the two sides of a coin (Rosli, 2013).
5) Sub Contracting : It is relationship where two parties do the contract with each other for the
parts of production, components, and many more. There are two parties involved that is the
contractor and the contractee and when the contracting is done between the small scale industries
it is termed as a Industrial sub contracting.
6) Franchising: It is a system for distributing the goods or services selectively through the
medium of the outlets which are owned by the retailer or the dealer. It is basically a patent
company or license of the trademark., which entitles the holder to sell or distribute the products
or services under a brand name according to some terms and conditions.
Government financial support for small and medium scale industries
There are number of government schemes created to help small and medium size
enterprise to access finance and grant loans which are mentioned below.
Enterprise Finance Guarantee Scheme: This scheme was set up by the labour government
to support lending of the banks to the SME's. In Wiser, the company can use this scheme to take
loans or refinance the current loans and to cover the shortage of the cash flow (Saguy, I. 2014).
Enterprise Capital Funds: It was established in 2006, and are government backed venture
funds of capital that concentrates to invest in the rapid growing SME's. Here Wiser uses this
scheme, to do funding for the organisation and to make an application to the funds such as
Amadeus Enterprise Fund, Catapuit Growth Fund, Dawn ECF and many more.
Characteristics of SMEs are mentioned below. Dependence on few employees: Wiser has very few employees and this few employees
do all the necessary tasks of the company which includes innovation, hiring etc. But this
sometimes give the disadvantage to the company as all the employees do not have the
skills which are needed to perform multiple tasks at a time.
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 Relationship: Wiser has limited services of recruitment which establish a strong
relationship with their partners and helps to maintain their sustainability in the market.
The company gives the services which satisfies the clients which lead to developing of a
healthy relationship between the company and clients which help in increase in the
financial terms of the company (Taiwo, 2012).
 Simplicity: The company has a business structure which is simple which allows Wiser to
adjust and adapt quickly in the dynamic changes of the market without addressing to the
head level managers.
CONCLUSION
The assignments concludes the the introduction of the small scale and medium scale
enterprises. It also involves the size and the description of the company Wiser. It throws the light
on the characteristics, nature and the meaning of the enterprise and the entrepreneur in context
with the company. Under findings the growth and development of the small scale enterprises is
been mentioned along with the growth strategies of the enterprise which will help the Wiser
company to grow and develop and increase its share in the market. It also involves the
contemporary issues faced by the Wiser company and the environmental factors that affect the
the companies and the government schemes launched for the small and medium scale
enterprises. These schemes helps to grant loans and funds from the banks or financial
institutions. The growth strategies includes various types of methods which help in the
enlargement and expansion of the business of the enterprise. The contemporary issues are the
issues which are unwanted issues within the organisation which includes social, political and
legal issues of the environment.
RECOMMENDATIONS
There are some recommendations for the small and medium scale enterprises which are
mentioned . The company should increase the number of employees so that they work effectively
and efficiently. The company should increase their areas of servicing so that it can do
development in the products and further development in the international market. They should
implement new technologies and should learn the use of new technologies to adapt to the
changes coming in the dynamic market. In terms of improvement of human resources, the
government should re examine the programs which attract the employees of the Wiser company.
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They should improve the quality of the services they are providing for the employment and hire
fresh and talented people for the company. Credit facilities provide by the commercial
institutions play an important role and government should produce schemes which will help the
company to get credit facilities. In order to motivate the employees to bring out creative and
innovative ideas for the business, it necessary for the company to come out with different reward
and appreciate programs. The company needs to expand its market in the urban and rural areas as
well. The government should introduce more schemes so that they will be more employment in
the small and medium scale industry. The Wiser company should have a well qualified and
skilled labours which will help them to function in the organisation can effectively and
efficiently do the tasks of the organisation and should also impose with proper ideas and plans
which will help in the growth in the organisation of the employees as well as the growth of the
company. Efforts are needed to develop more infrastructure facilities within the organisation like
regular power supply , technology services and many more.
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REFERENCES
Books and Journals
Bruhn, M., Karlan, D. and Schoar, A., 2013. The impact of consulting services on small and
medium enterprises: Evidence from a randomized trial in mexico. The World Bank.
Cosgun, V. and Dogerlioglu, O., 2012. Small and Medium Enterprises.
Gbandi, E. C. and Amissah, G., 2014. Financing options for small and medium enterprises
(SMEs) in Nigeria. European Scientific Journal. ESJ. 10(1).
Hsu, J. L. and Cheng, M. C., 2012. What prompts small and medium enterprises to engage in
corporate social responsibility? A study from Taiwan. Corporate Social Responsibility
and Environmental Management. 19(5). pp.288-305.
Kim, H. D., Lee, I. and Lee, C. K., 2013. Building Web 2.0 enterprises: A study of small and
medium enterprises in the United States. International Small Business Journal. 31(2).
pp.156-174.
Kotelnikov, V., 2014. Small and medium enterprises and ICT.
Legg, S. J., and et. al., 2015. Managing safety in small and medium enterprises.
Mahmood, R. and Hanafi, N., 2013. Entrepreneurial orientation and business performance of
women-owned small and medium enterprises in Malaysia: Competitive advantage as a
mediator. International Journal of Business and Social Science (IJBSS). 4(1). pp.82-90.
Olszak, C. M. and Ziemba, E., 2012. Critical success factors for implementing business
intelligence systems in small and medium enterprises on the example of upper Silesia,
Poland. Interdisciplinary Journal of Information, Knowledge, and Management. 7(12).
pp.129-150.
Olusegun, A. I., 2012. Is small and medium enterprises (SMEs) an
entrepreneurship?. International Journal of Academic Research in Business and Social
Sciences. 2(1). p.487.
Rosli, M. M. and Sidek, S., 2013. The Impact of Innovation on the Performance of Small and
Medium Manufacturing Enterprises:: Evidence from Malaysia. Journal of Innovation
Management in Small & Medium Enterprises. 2013. p.1.
Saguy, I. S. and Sirotinskaya, V., 2014. Challenges in exploiting open innovation's full potential
in the food industry with a focus on small and medium enterprises (SMEs). Trends in
Food Science & Technology. 38(2). pp.136-148.
Taiwo, M. A., Ayodeji, A. M. and Yusuf, B. A., 2012. Impact of small and medium enterprises
on economic growth and development. American journal of business and
management. 1(1). pp.18-22.
Watkins, J. A., 2012. A literature review of small and medium enterprises (SME) risk
management practices in South Africa. African journal of business management. 6(21).
pp.6324-6330.
Wynarczyk, P., and et. al., 2016. Managerial labour markets in small and medium-sized
enterprises. Routledge.
Yeboah-Boateng, E. O. and Essandoh, K. A., 2014. Factors influencing the adoption of cloud
computing by small and medium enterprises in developing economies. International
Journal of Emerging Science and Engineering. 2(4). pp.13-20.